Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S737 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	SENATE DOCKET, NO. 2106 FILED ON: 1/17/2025
3	3	SENATE . . . . . . . . . . . . . . No. 737
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	James B. Eldridge
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act to promote economic mobility through matched savings.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :James B. EldridgeMiddlesex and Worcester 1 of 11
16	16	SENATE DOCKET, NO. 2106 FILED ON: 1/17/2025
17	17	SENATE . . . . . . . . . . . . . . No. 737
18	18	By Mr. Eldridge, a petition (accompanied by bill, Senate, No. 737) of James B. Eldridge for
19	19	legislation to promote economic mobility through matched savings. Financial Services.
20	20	[SIMILAR MATTER FILED IN PREVIOUS SESSION
21	21	SEE SENATE, NO. 628 OF 2023-2024.]
22	22	The Commonwealth of Massachusetts
23	23	_______________
24	24	In the One Hundred and Ninety-Fourth General Court
25	25	(2025-2026)
26	26	_______________
27	27	An Act to promote economic mobility through matched savings.
28	28	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
29	29	of the same, as follows:
30	30	1 Chapter 23A of the General Laws is hereby amended by adding the following three
31	31	2 sections:-
32	32	3 Section 70.
33	33	4 (a) As used in this section, the following words shall, unless the context clearly requires
34	34	5 otherwise, have the following meanings:
35	35	6 “Account holder”, a household that is an eligible participant.
36	36	7 “Eligible participant”, a household which has an income that does not exceed 80 percent
37	37	8of the median income for the area, as such median shall be determined from time to time by the
38	38	9secretary of the United States Department of Housing and Urban Development pursuant to 42 2 of 11
39	39	10U.S.C. 1437(a)(B)(2) or any successor legislation and the regulations promulgated thereunder;
40	40	11provided however, that:
41	41	12 (1) notwithstanding any federal law or rule to contrary, a person shall not be denied
42	42	13assistance under this chapter based wholly or in part on the amount of the person’s assets;
43	43	14 (2) that any income generated by such assets may be treated as countable income;
44	44	15 (3) receipt of federal, state or local public assistance of any form shall not make a
45	45	16person ineligible to be an account holder.
46	46	17 “Community-based organization”, a public or private nonprofit organization that is
47	47	18exempt from taxation under 26 U.S.C. 501(c)(3), a community foundation, housing authority, a
48	48	19city or town with demonstrated effectiveness in representing a community or a significant
49	49	20segment of a community and providing educational or related social services to individuals in
50	50	21that community.
51	51	22 “Fiscal intermediary”, a Massachusetts nonprofit organization that is exempt from
52	52	23taxation under 26 U.S.C. 501(c)(3) with demonstrated effectiveness in matched-savings account
53	53	24management.
54	54	25 “Financial institution”, a bank, credit union, any association or corporation chartered by
55	55	26the commonwealth under chapter 168, 170, 171 or 172, or an individual, association, partnership
56	56	27or corporation incorporated or doing a banking business in the commonwealth subject to the
57	57	28supervision of the commissioner.
58	58	29 “Matched-savings account”, a contract between an account holder and a fiscal
59	59	30intermediary to increase their economic mobility. 3 of 11
60	60	31 (b) (1) A person who qualifies to become an account holder may establish a matched-
61	61	32savings account. The matched-savings account shall permit the account holder to work towards
62	62	33approved savings goals set forth in subsection (c).
63	63	34 (2) A matched-savings account shall provide for the deposit of funds into 2 accounts at a
64	64	35financial institution: (i) a designated account at a financial institution by the account holder and;
65	65	36 (ii) the deposit of matching funds by the fiscal intermediary into a designated account at a
66	66	37financial institution.
67	67	38 (3) Before creating a matched-savings account, a person shall create a savings plan
68	68	39developed by the participant and a community-based organization. The plan shall provide the
69	69	40participant with the appropriate financial education, counseling and asset-specific training
70	70	41designed to increase the economic mobility of the participant’s household.
71	71	42 (c) Approved savings goals shall serve to increase economic mobility including, but not
72	72	43limited to:
73	73	44 (1) the acquisition of post-secondary education or job training;
74	74	45 (2) if the account holder has established the account for the benefit of a household
75	75	46member who is under the age of 18 years, the payment of extracurricular non-tuition expenses
76	76	47designed to prepare the member for post-secondary education or job training;
77	77	48 3) if the account holder has established a savings plan authorized under 26 U.S.C. 529 or
78	78	49prepaid tuition plan on behalf of a designated beneficiary, the participant shall provide accurate
79	79	50account statements to the fiduciary organization in order to earn match; 4 of 11
80	80	51 (4) the purchase of a primary residence; provided further, that account moneys under this
81	81	52paragraph shall be broadly construed to include, but not be limited to: (i) payment on the
82	82	53purchase price of the residence; and (ii) any usual or reasonable settlement, financing, or other
83	83	54closing costs;
84	84	55 (5) the rental of a primary residence; provided further, that account moneys under this
85	85	56paragraph shall be broadly construed to include, but not be limited to: (i) security deposits; (ii)
86	86	57first month’s rent; (iii) prepayment of last month’s rent; (iv) application fees; (v) major
87	87	58 appliances not included in the lease necessary to move into the primary residence; and
88	88	59(vi) moving expenses;
89	89	60 (6) the capitalization of a small business; provided further, that account moneys under
90	90	61this paragraph shall be broadly construed to include, but not be limited to: (i) capital, plant,
91	91	62equipment, and inventory expenses, (ii) hiring employees upon capitalization of the small
92	92	63business; (iii) working capital;
93	93	64 (7) improvements, repairs, or modifications to a home already owned and occupied as a
94	94	65primary residence in Massachusetts by the account holder;
95	95	66 (8) the purchase of equipment, adaptive technology or specialized training required to
96	96	67become competitive in obtaining or maintaining employment, or to start or maintain a business,
97	97	68or to increase the economic mobility of the account holder;
98	98	69 (9) the purchase or repair of a vehicle, as specified in the account holder’s matched-
99	99	70savings plan for increasing the economic mobility of the person;
100	100	71 (10) the saving of funds for a qualified individual retirement account; 5 of 11
101	101	72 (11) the payment of debts owed when the account holder is saving for another allowable
102	102	73purpose, as specified in the account holder’s matched-savings plan; provided further, a non-profit
103	103	74organization with demonstrated expertise shall provide credit counseling;
104	104	75 (12) the creation or improvement of a credit score by obtaining a secured credit-builder
105	105	76loan or a financial product that is designed to improve credit, as specified in the account holder’s
106	106	77matched-savings plan for increasing the economic independence of the person.
107	107	78 (d) Policy
108	108	79 1. Contributions
109	109	80 Any earnings an individual contributes to their Matched-savings account are deducted
110	110	81from their wages in determining countable income. An individual's contribution that are
111	111	82deposited in a Matched-savings account are excluded from resources.
112	112	83 2. Matching funds
113	113	84 Any matching funds that are deposited in a Matched-savings account are excluded from
114	114	85income and resources.
115	115	86 3. Interest
116	116	87 Any interest earned on the individual's own contributions and on the matching funds that
117	117	88are deposited in a Matched-savings account is excluded from income and resources.
118	118	89 (e) A fiscal intermediary may qualify as the recipient of account contributions only if the
119	119	90fiscal intermediary structures the accounts to have the following features:
120	120	91 (1) The fiscal intermediary matches amounts deposited by the account holder according 6 of 11
121	121	92 to a formula established by the fiscal intermediary. The fiscal intermediary shall deposit
122	122	93up to $4 into the account for each $1 deposited by the account holder.
123	123	94 (2) The matching deposits by the fiscal intermediary to the matched-savings account are
124	124	95placed in a savings account that is controlled by the fiscal intermediary and is separate from the
125	125	96savings account of the account holder.
126	126	97 (e)(1) If an emergency occurs, an account holder may withdraw all or part of the account
127	127	98holder’s deposits to a matched-savings account for a purpose not described in subsection (c). A
128	128	99financial emergency is a disruption to the account holder’s economic circumstances including,
129	129	100but not limited to: (i) making payments for necessary medical expenses; (ii) avoiding eviction of
130	130	101the account holder from the account holder’s residence; (iii) for necessary living expenses
131	131	102following a change in economic circumstances.
132	132	103 (2) The account holder shall resume contributions to the account holder’s savings account
133	133	104after the account holder deems that the financial emergency has been resolved. The account
134	134	105holder may choose to continue to pursue the savings plan through the appropriate financial
135	135	106education, counseling and asset-specific training in coordination with the account holder’s
136	136	107community-based organization while experiencing the financial emergency.
137	137	108 (3) If an account holder withdraws funds from a matched-savings account for other than
138	138	109an approved purpose, the fiscal intermediary may remove the account holder from the program.
139	139	110 (f)(1) If the account holder of an account established for the purpose set forth in the third
140	140	111paragraph through the tenth paragraph, inclusive, of subsection (c) has achieved the account’s
141	141	112approved purpose in accordance with the matched-savings plan developed by the account holder,
142	142	113the account holder may withdraw, or authorize the withdrawal of, the remaining amount of all 7 of 11
143	143	114deposits, including matching deposits, and interest in the account as follows: (i) for an account
144	144	115established for the purpose set forth in subsection (c)(3) of this section, by rolling over the entire
145	145	116withdrawal amount into one or more savings plans authorized under 26 U.S.C. 529, the
146	146	117establishment of which is the purpose of the matched-savings account; or (ii) for an account
147	147	118established for the purpose set forth in subsection (c)(10) of this section, by rolling over the
148	148	119entire withdrawal amount into an individual retirement account, a retirement plan or a similar
149	149	120account or plan established under the Internal Revenue laws of the United States.
150	150	121 (2) Upon withdrawal of all funds in the matched-savings account as provided in the first
151	151	122paragraph of this subsection, the account relationship shall terminate.
152	152	123 (g) (1) If an account holder moves from the area where the program is conducted or is
153	153	124otherwise unable to continue in the program, the fiscal intermediary may remove the account
154	154	125holder from the program.
155	155	126 (2) If the fiscal intermediary removes an account holder from the program, all matching
156	156	127deposits in the account and all interest earned on matching deposits shall revert to the fiscal
157	157	128intermediary. The fiscal intermediary shall use the reverted funds as a source of matching
158	158	129deposits for other accounts.
159	159	130
160	160	131 (h) (1) The executive office of housing and livable communities may select a fiscal
161	161	132intermediary to administer moneys directed by the commonwealth to matched-savings account
162	162	133purposes. 8 of 11
163	163	134 (2) In making the selection, the executive office of housing and livable communities shall
164	164	135consider factors related to its effectiveness including, but not limited to: (i) the ability of the
165	165	136fiscal intermediary to implement and administer the matched-savings program, including the
166	166	137ability to verify account holder eligibility, certify that matching deposits are used only for
167	167	138approved purposes and exercise general fiscal accountability; (ii) the capacity of the fiscal
168	168	139intermediary to convene and provide professional development opportunities that increase the
169	169	140capacity of community-based organizations to provide financial education, counseling, and asset-
170	170	141related training to account holders; (iii) the partnerships that the fiscal intermediary maintains
171	171	142with like-minded community-based organizations, government agencies, and other entities that
172	172	143support asset-building and wealth creation among the lower-income households across the
173	173	144commonwealth; (iv) Subject to executive office of housing and livable communities rules, a
174	174	145fiscal intermediary has sole authority over, and responsibility for, the administration of matched-
175	175	146savings accounts.
176	176	147 (3) The fiscal intermediary may use at least 5 percent of the allocated moneys to the
177	177	148matched-savings program for account management, compliance, and participation in audits.
178	178	149 (4) (i) The fiscal intermediary shall ensure that account holders include people of color
179	179	150and women, at least in such proportion as these groups exist in the commonwealth’s population
180	180	151as periodically determined by the state secretary as the commonwealth’s chief census officer. (ii)
181	181	152The fiscal intermediary shall ensure that account holders represent diverse geographic areas of
182	182	153the commonwealth, including urban, rural and suburban areas.
183	183	154 (5) The fiscal intermediary shall provide the executive office of housing and livable
184	184	155communities with an annual report of the fiscal intermediary's matched-savings account program 9 of 11
185	185	156activity. The fiscal intermediary shall file the report with the executive office of housing and
186	186	157livable communities no later than 90 days after the end of the fiscal intermediary’s fiscal year.
187	187	158The report shall include, but is not limited to: (i) the number of matched-savings accounts
188	188	159administered by the fiscal intermediary; (ii) the amount of deposits and matching deposits for
189	189	160each account; (iii) the purpose of each account; (iv) the number of withdrawals made; and (v)
190	190	161participant demographics including, but not limited to, race, ethnicity, age, gender identity and
191	191	162sexual orientation, and any other information the executive office of housing and livable
192	192	163communities may require for the purpose of making a return-on-investment analysis.
193	193	164 (i) (1) Subject to executive office of housing and livable communities rules, the
194	194	165responsibility of the community-based organization extends to all aspects of operating the
195	195	166matched-savings program, including, but not limited to: (i) marketing and outreach; (ii)
196	196	167verification and enrollment of participants; (iii) financial education; (iv) one-on-one counseling;
197	197	168(v) conducting asset-specific training; (vi) indirect costs; (vii) and other required verification and
198	198	169compliance activities.
199	199	170 (2) There is no limit to how many community-based organizations work with the selected
200	200	171fiscal intermediary if they satisfy the required qualifications. The executive office of housing and
201	201	172livable communities can set how many community-based organizations participating in offering
202	202	173the program.
203	203	174 (3) A community-based organization shall receive no more than 25 per cent of the
204	204	175allocated monies for providing all activities set forth in the first paragraph. (j) The executive
205	205	176office of housing and livable communities may issue regulations to implement this section. 10 of 11
206	206	177 Section 70. (a) There shall be a Matched Savings Trust Fund, which shall be administered
207	207	178by the secretary of housing and livable communities. Monies in the trust fund shall be deposited
208	208	179with the state treasurer in a manner that will secure the highest interest rate available consistent
209	209	180with the safety of the trust fund.
210	210	181 (b) The secretary shall appoint the trustee of the fund, who shall serve until a successor is
211	211	182appointed.
212	212	183 (c) There shall be credited to the trust fund:
213	213	184 (1) all funds appropriated by the general court; (2) federal funds directed to the trust fund;
214	214	185(3) grants and any other funds directed to the trust fund; and (5) all interest earned on monies in
215	215	186the trust fund.
216	216	187 (d) Expenditures from the fund shall not be subject to appropriation and balances
217	217	188remaining at the end of a fiscal year shall not revert to the General Fund. Expenditures from the
218	218	189fund shall be made for promoting economic mobility among account holders as defined in
219	219	190section 70. Expenditures from the fund may be made for satisfying the objectives of section,
220	220	191including but limited to, providing matches to account holder contributions to their accounts,
221	221	192financial education, counseling, asset-specific training, for program administration, the fiscal
222	222	193intermediary and for oversight by the executive office of housing and livable communities.
223	223	194 (e) Not later than August 1 of each fiscal year, the secretary shall submit a spending plan
224	224	195to the secretary of administration and finance and the house and senate committees on ways and
225	225	196means. For the purpose of accommodating discrepancies between the receipt of revenues and
226	226	197related expenditures, the secretary may incur obligations and the comptroller may certify
227	227	198payment amounts not to exceed the most recent revenue estimate submitted by the secretary and 11 of 11
228	228	199approved by the secretary of administration and finance but the fund shall be in balance by the
229	229	200close of each fiscal year.